INCOTERMS Flashcards
(13 cards)
What are the 7 Incoterms for any mode of transport?
EXW - Ex Works (insert place of delivery)
FCA - Free Carrier (Insert named place of delivery) CPT - Carriage Paid to (insert place of destination) CIP - Carriage and Insurance Paid To (insert place of destination) DAP - Delivered at Place (insert named place of destination) DPU - Delivered at Place Unloaded (insert of place of destination) DDP - Delivered Duty Paid (Insert place of destination). Note: the DPU Incoterms replaces the old DAT, with additional requirements for the seller to unload the goods from the arriving means of transport.
What are the 4 incoterms for sea and inland waterway transport?
FAS - Free Alongside Ship (insert name of port of loading)
FOB - Free on Board (insert named port of loading) CFR - Cost and Freight (insert named port of destination) CIF - Cost Insurance and Freight (insert named port of destination)
EXW
Ex Works (insert place of delivery)
Under EXW, the seller’s responsibility ends once the goods are made available at their premises. The buyer handles everything: loading, transport, export clearance, and insurance.
Example: A German manufacturer sells machinery EXW Frankfurt to a buyer in India. The Indian buyer arranges pick-up, customs clearance, and international shipping. Risk passes to the buyer at the seller’s door.
FCA
Free Carrier (Insert named place of delivery)
The seller delivers goods to a named carrier or location, and handles export formalities.
Example: A French supplier delivers goods to Marseille port for shipment to Nigeria under FCA. Once the goods are loaded onto the truck, risk passes to the Nigerian buyer.
CPT
Carriage Paid to (insert place of destination)
The seller pays for carriage to the destination, but risk transfers when the goods are handed to the first carrier.
Example: A Canadian company shipping to Mexico under CPT Monterrey pays for transport, but the Mexican buyer assumes risk once the goods are with the carrier.
CIP
Carriage and Insurance Paid To (insert place of destination)
Similar to CPT, but the seller also pays for insurance.
Example: A UK exporter shipping goods to Brazil under CIP São Paulo must insure the goods and deliver them to the carrier. Risk still passes at handover, not at the destination.
DAP
Delivered at Place (insert named place of destination)
The seller is responsible for delivery to a named destination. The buyer handles import duties and unloading.
Example: A Japanese exporter shipping electronics to Dubai under DAP is responsible for the journey until the goods reach the agreed point in Dubai.
DPU
Delivered at Place Unloaded (insert of place of destination)
The seller delivers and unloads the goods at the agreed location.
Example: A Chinese company selling goods under DPU Hamburg unloads the shipment at the buyer’s warehouse. Risk passes after unloading.
DDP
Delivered Duty Paid (Insert place of destination).
The seller covers all costs, including import duties and VAT.
Example: A U.S. supplier ships goods to Sweden under DDP Stockholm. The U.S. company handles everything until the goods are delivered to the buyer, including Swedish customs and taxes.
FAS
Free Alongside Ship (insert name of port of loading)
The seller delivers the goods alongside the ship at the named port. The buyer is responsible for loading.
Example: An Indonesian coal exporter uses FAS Surabaya. The buyer arranges loading and ocean freight.
FOB
Free on Board (insert named port of loading)
The seller loads the goods on board the ship. Risk passes at that point.
Example: An Australian wheat supplier ships FOB Brisbane. Once the wheat is on the ship, the buyer assumes responsibility.
CFR
Cost and Freight (insert named port of destination)
The seller pays for shipping to the destination port, but risk passes once the goods are on the ship.
Example: A Brazilian exporter sells iron ore CFR Qingdao. The Chinese buyer carries the risk during transit, though the seller pays for transport.
CIF
Cost Insurance and Freight (insert named port of destination)
Same as CFR, but the seller must also insure the goods.
Example: A Saudi company shipping oil to Rotterdam under CIF must arrange transport and insurance, but risk still passes when the goods are loaded on the vessel.
